Epic Games vs. Apple: European Battle Begins

Epic Games Escalates Dispute with Apple to European Union

Epic Games has broadened its legal challenge against Apple’s App Store policies, filing a formal complaint with antitrust regulators within the European Union.

The company, creator of the widely-played online game Fortnite, announced in a blog post that it is extending its pursuit of “fairer digital platform practices” to Europe.

This action follows the EU’s existing investigation into competition concerns related to the Apple App Store and its associated payment system, Apple Pay.

EU Investigation and Platform Regulation

A formal investigation into specific Apple practices was initiated by the EU last year.

Furthermore, European lawmakers have recently outlined plans to strengthen platform regulation, specifically targeting “gatekeeper” platforms.

The goal is to ensure fairness and accountability in their interactions with third-party developers and businesses.

The increasing scrutiny of platform power is evident among regulators and legislators globally.

Details of the Complaint

The complaint, submitted to the European Commission’s Directorate-General for Competition, asserts that Apple has actively suppressed competition in app distribution and payment processing through a series of restrictive measures.

Epic alleges that Apple leverages its control over the iOS ecosystem to prioritize its own interests while hindering competitors.

This behavior, according to Epic, constitutes an abuse of a dominant market position and a violation of EU competition law.

The company is not seeking financial compensation but rather requests that EU authorities implement measures to address what it describes as Apple’s “monopoly channels”.

Statements from Epic Games

“The core issue concerns the future of mobile platforms,” stated Tim Sweeney, founder and CEO of Epic Games.

“Consumers deserve the freedom to install applications from their preferred sources, and developers require a fair marketplace to compete effectively.”

He emphasized Epic’s commitment to challenging Apple’s platform dominance, arguing that it stifles competition, leads to inflated prices, and grants Apple excessive control over developers’ livelihoods.

Background of the Legal Battle

Epic Games initiated a lawsuit against Apple in the United States last August after Apple removed Fortnite from the App Store.

This action followed Epic’s attempt to circumvent Apple’s in-app purchase system and associated fees by integrating its own payment mechanism directly into Fortnite.

Apple responded by threatening to revoke Epic’s developer account and access to Unreal Engine tools, a move that would have impacted numerous third-party app developers.

However, a U.S. court prevented Apple from taking this drastic step.

Expanding Legal Fronts

Since then, Epic has filed similar legal complaints against Apple in both Australia and the United Kingdom.

Now, the company is also appealing to EU regulators to intervene.

The EU’s antitrust division launched its own formal investigation into Apple last summer, prompted by a similar complaint from Spotify regarding App Store rules and the 30% commission on in-app payments.

Additionally, an unnamed e-book and audiobook distributor had previously raised concerns about the impact of App Store policies on competition.

The European Commission has confirmed receipt of Epic Games’ complaint and will evaluate it according to standard procedures.

Epic’s Core Arguments

Epic contends that Apple is denying Fortnite users on iOS the option to choose between Apple’s payment system and direct payment to Epic.

The company claims that allowing direct payments would result in savings for consumers, although Epic itself would also benefit from avoiding Apple’s commission.

Epic has also sought permission to launch an Epic Games Store on iOS, a request that Apple denied, citing security, privacy, and content standards.

Apple’s Response and Related Ventures

In 2019, Apple introduced Apple Arcade, its own gaming subscription service, offering access to exclusive games across its devices.

This launch is viewed by some as a catalyst for Epic Games’ decision to pursue an aggressive antitrust strategy against Apple.

Epic has also taken issue with Google’s practices regarding in-app payments on Android, leading to Fortnite’s removal from the Google Play Store last year.

However, Google’s Android platform allows for sideloading of apps and alternative app stores, potentially making it more challenging to build a successful antitrust case.

Market Share Considerations

While Android holds the dominant share of the smartphone market, Apple still controls a significant portion, representing less than a fifth of the global market.

This market share dynamic is a key factor in the ongoing legal and regulatory battles between Epic Games and Apple.